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Trump's Iran Deal: What Happens Next? | Silk and Steel · UK Column Radio

0:01
Speaker 1: Hello, and welcome to another episode of the Silk and
0:04
Speaker 1: Steel Podcast. I'm your host Carl Za. Today I have
0:08
Speaker 1: back on my show crowd's favorite, uh, doctor Warwick Powell
0:12
Speaker 1: from Australia. So Warwick, first of all, welcome back to
0:17
Speaker 1: the show. We have a lot to talk about today.
0:22
Speaker 1: You know, we just had the Trump announcement that the
0:26
Speaker 1: Straight or Homose is open, quote unquote open to international
0:31
Speaker 1: traffic now because there's a pending deal m OU Memorandum
0:37
Speaker 1: of Understanding that's to be signed this Friday with you wrong,
0:42
Speaker 1: which allows will allow free passage of ships through the
0:46
Speaker 1: Straight or Homose. Uh.
0:49
Speaker 2: What are your thoughts first on that?
0:52
Speaker 3: Well, there's always an upside when warring parties at least
0:58
Speaker 3: put down the guns for a little while. So, you know,
1:01
Speaker 3: I think that it's important to welcome any move, however
1:08
Speaker 3: small and however potentially temporary, they are towards peaceful resolution
1:13
Speaker 3: of conflicts. Number one. I think Number two, though, is
1:18
Speaker 3: there are probably more questions raised and answered as a
1:21
Speaker 3: result of this MoU. One is, of course, the likelihood
1:25
Speaker 3: that the MoU will actually get signed. That's the first one.
1:30
Speaker 3: What's the English saying? Many a slip TwixT the cup
1:33
Speaker 3: and the lip, and there are a number of days
1:37
Speaker 3: yet to go, and no doubt there are forces at
1:41
Speaker 3: work that are not supportive of even this particular pathway.
1:47
Speaker 3: So that's the second thing. From a longer term point
1:50
Speaker 3: of view, it does raise a lot of questions, one
1:52
Speaker 3: around the US position from a security architecture point of
1:57
Speaker 3: view in the region. Secondly, the status of Ira't really
2:00
Speaker 3: as a regional power. Thirdly, the extent to which any
2:05
Speaker 3: agreement can be reached within the sixty days, and how
2:08
Speaker 3: good that agreement's going to be in the long run.
2:10
Speaker 3: Is it going to actually lead to a long term
2:17
Speaker 3: stabilization of the situation in West Asia or is it
2:23
Speaker 3: another short term interlude between outbreak of conflict. Once again,
2:29
Speaker 3: let's not forget that Israel and the project of Greater
2:35
Speaker 3: Israel has been the centerpiece of American foreign policy in
2:39
Speaker 3: the region for many decades, and of course is the
2:42
Speaker 3: centerpiece of foreign policy and regional policy from the point
2:45
Speaker 3: of view of the net Yahoo government, and this particular
2:50
Speaker 3: MoU goes a long way in the opposite direction to
2:56
Speaker 3: the Greater Israel projects. So I do worry that this
3:01
Speaker 3: is nothing more than a stopgap measure aimed at buying time,
3:08
Speaker 3: and ultimately that does not lead to a longer term
3:12
Speaker 3: resolution of the problems. I hope that it does create
3:16
Speaker 3: some room for negotiations and state craft to prevail to
3:22
Speaker 3: arrive at something that can actually work across the region.
3:26
Speaker 3: And I think we've discussed before the Chinese initiatives when
3:31
Speaker 3: the Iranian Foreign Minister visited Beijing a few weeks ago,
3:35
Speaker 3: where both of them, you know, the Chinese Foreign Ministry
3:38
Speaker 3: and Arachi commented on the desirability of there being a
3:44
Speaker 3: new regional security architecture developed and anchored by the countries
3:50
Speaker 3: of the region itself, in other words, without the United
3:53
Speaker 3: States in the spirit or under the principles of good neighborly.
4:01
Speaker 3: And it often takes a little bit of time to
4:07
Speaker 3: bring disparate perspectives together, and hopefully this creates a window
4:12
Speaker 3: for that. I mean, the pessimist, of course, would always say, well, look,
4:15
Speaker 3: the Americans aren't going to change their view. They're really
4:18
Speaker 3: just buying some time. The Israeli is going to stick
4:20
Speaker 3: to their guns, literally speaking, and we'll be lucky if
4:24
Speaker 3: we get the Friday when this MOHU is meant to
4:28
Speaker 3: be signed. And even if it's signed. We're going to
4:30
Speaker 3: be lucky that it lasts a month. That's where it's at.
4:34
Speaker 3: I don't know whether, in fact, by the way, the
4:39
Speaker 3: claims being made about the arrangements by President Trump reflects
4:44
Speaker 3: how the Uranians understand the MoU to be. The alternative
4:51
Speaker 3: view of the MoU is that in fact, the opening
4:54
Speaker 3: of the straits of full moves will beyond Uranian terms,
4:57
Speaker 3: that there will be significant free unfreezing of here to
5:02
Speaker 3: four frozen Iranian assets frozen by the Americans, and that
5:07
Speaker 3: the Americans will also make significant and I'm talking hundreds
5:11
Speaker 3: of billions of dollars worth of reconstruction contributions to rebuild
5:18
Speaker 3: Iran and I guess other infrastructure within the region. So
5:23
Speaker 3: we've got two versions of this thing being told out
5:25
Speaker 3: there from what I've seen, and I'm not sure we're
5:29
Speaker 3: we're that much wiser for it.
5:34
Speaker 1: Yeah, well, that, as you say, there's still a lot
5:38
Speaker 1: of uncertainty from now to Friday. Even after Friday arrived,
5:43
Speaker 1: there's this sixty days trial period that remains to be
5:49
Speaker 1: seeing how both party can stick to the agreement. As
5:52
Speaker 1: you mentioned, there are people who want to see this
5:56
Speaker 1: steel fair well, particularly Israel and Yahoo they do not.
6:02
Speaker 2: Uh.
6:02
Speaker 1: They already stated they will continue their UH to pursue
6:06
Speaker 1: their objective in southern Lebanon, where they're steadily turning southern
6:12
Speaker 1: Leblon into another gaza. And and Iran has said time
6:17
Speaker 1: and time again that Lebanon must be part of the deal.
6:21
Speaker 1: You know, Israel must be restrained for this, this comprehensive
6:27
Speaker 1: deal to work. So there's a lot of uncertainties. UH,
6:31
Speaker 1: but it is a I think it is a step
6:34
Speaker 1: in the right direction.
6:35
Speaker 2: Uh.
6:36
Speaker 1: There are now some UH by satellite intelligence and marine
6:40
Speaker 1: traffic monitors. There are some VLCC tankers now are reheading
6:48
Speaker 1: back towards a golf direction in anticipation of the opening
6:52
Speaker 1: of the trade or home moves. So that remained to
6:55
Speaker 1: be seen. But what do you think about the economic
7:00
Speaker 1: impact to the world economy. You know, we already had
7:06
Speaker 1: three months of you know, more than three months, three
7:09
Speaker 1: three months and a half of the closure of the
7:11
Speaker 1: street or Hormus where nearly twenty percent of the world's
7:16
Speaker 1: oil and gas was cut off. Do you think it's
7:22
Speaker 1: this this reopening, if takes place, do you think is
7:28
Speaker 1: that enough to bring us back from the precipitous of
7:33
Speaker 1: economic collapse? That the world was facing before.
7:38
Speaker 3: Well. Look, assuming that the agreement does deliver some kind
7:45
Speaker 3: of safe passage through the straits of hor moves, and
7:49
Speaker 3: that that safe passage becomes something that is ensurable and reliable,
7:55
Speaker 3: then downstream actors will begin to adjust some of their planning,
8:00
Speaker 3: particularly planning in relation to long term destruction of demand,
8:05
Speaker 3: because one of the concerns that downstream actors have, of course,
8:09
Speaker 3: is that at some point in time, if there is
8:11
Speaker 3: not going to be adequate flows of fuel that they
8:16
Speaker 3: need for their activities at the prices that their activities
8:19
Speaker 3: can afford, then they're literally going to have to cease
8:22
Speaker 3: those activities. Now, of course, ceasing activities in the short
8:26
Speaker 3: term can take place by way of mothballing, so you
8:29
Speaker 3: can bring them back online when the energy is available.
8:33
Speaker 3: But in the long run, if supplies is going to
8:38
Speaker 3: be impaired for a significant period of time, then I
8:41
Speaker 3: think that there would be firms that will be considering
8:44
Speaker 3: how to substitute move to alternative fuel sources, which leads
8:49
Speaker 3: to a period of permanent demand destruction whilst these transitions
8:55
Speaker 3: take place. If, however, this passage opens up, then some
9:00
Speaker 3: of those decisions can be deferred and we're likely to
9:03
Speaker 3: be deferred. Having said that, we're going to have quite
9:07
Speaker 3: a number of months before the volumes of available crude
9:13
Speaker 3: oil and gas begin to recover towards the levels that
9:18
Speaker 3: existed in February this year. And that's for very practical reasons. Actually.
9:24
Speaker 3: You know, you've got to reopen some of the the
9:28
Speaker 3: oil fields, you've got to repair infrastructure, you've got to
9:31
Speaker 3: get the boats in place. And reports suggest, for example,
9:37
Speaker 3: in the L and G space, that Qatar expects that
9:41
Speaker 3: they'll have you know, something like eighty percent of their
9:46
Speaker 3: lost capability of the capability back into place in two
9:49
Speaker 3: to three months time. But notice that there's a missing
9:53
Speaker 3: twenty percent and that's not going to come back on
9:55
Speaker 3: stream particularly quickly, so there is some long term damage
9:59
Speaker 3: to supply. We've also got to think a change in
10:03
Speaker 3: perspectives on energy risk and how countries and enterprises will
10:10
Speaker 3: seek to manage that looking forward. The idea that countries
10:15
Speaker 3: and enterprises just go back to the status quo anti
10:18
Speaker 3: I think is not credible. Countries and enterprises have been
10:24
Speaker 3: thinking about how to reduce the extent to which they
10:28
Speaker 3: are exposed to this kind of situation in the future.
10:32
Speaker 3: In anticipation that you know, we're in for a rocky
10:36
Speaker 3: period and these kinds of disruptions are going to be
10:40
Speaker 3: part of the calculus going forward. And what that has
10:45
Speaker 3: meant is, of course intensified moves towards electrification where enterprises,
10:52
Speaker 3: supply chains and countries can and that's going to change
10:56
Speaker 3: the composition of demand as well over the course of
10:59
Speaker 3: the medium term. So this particular war will have long
11:05
Speaker 3: lasting legacies because it will cause transformation, structural transformations, short
11:10
Speaker 3: term legacy, some demand destruction, some recovery in some month's
11:16
Speaker 3: time as supply begins to recover back to pre war levels.
11:21
Speaker 3: But ultimately the war has catalyzed, i think a reassessment
11:27
Speaker 3: of energy structure and energy risk, and that will see
11:30
Speaker 3: ongoing efforts made around the world to reduce dependency on
11:35
Speaker 3: oil from the Middle East for future economic development and activity.
11:41
Speaker 1: Yeah, there are some countries already made adjustment. For example,
11:47
Speaker 1: the country of Laos, the government have announced they have
11:52
Speaker 1: banned the importation of ice vehicles, you know, with some
11:56
Speaker 1: important exceptions. I mean that it makes sense because Laos
12:00
Speaker 1: is an oil poor country. They need to export over
12:04
Speaker 1: ninety percent of their refined petroleum products mostly from Thailand
12:09
Speaker 1: and they they're on the other hand, they're bounding in
12:12
Speaker 1: hydro power electricity, and Laos being the country next door
12:18
Speaker 1: to China, they can very quickly ramp up import of
12:23
Speaker 1: EV cars to satisfy their transportation need to be powered
12:28
Speaker 1: by clean hydro power produced domestically rather than relying on import.
12:34
Speaker 1: I think Loos powably not going to be They're probably
12:38
Speaker 1: just going to be one of the first country to
12:40
Speaker 1: take such drastic measure. Ethiopia apparently did that back in
12:44
Speaker 1: twenty twenty four. I bet you know the government are
12:46
Speaker 1: patting themselves on the shoulder right now to see how
12:50
Speaker 1: far sighted that that move was. So I expect this,
12:55
Speaker 1: you know, similar measure to be adopted by other countries
12:59
Speaker 1: as well. You know, now we have countries like Nepal
13:02
Speaker 1: that has that achieved more than sixty seventy percent sale
13:09
Speaker 1: of vehicle in new vehicle in evs. I mean like
13:12
Speaker 1: this this is just I think it's gonna this. This
13:16
Speaker 1: trend will only accelerate, especially with the Chinese quote unquote
13:23
Speaker 1: over capacity to to to to supply the world remained unabated.
13:30
Speaker 1: Uh speaking of China, China is surprisingly you know held
13:35
Speaker 1: up surprisingly well during this crisis. Now you know, three
13:39
Speaker 1: months and a half into the closure of Home Mouse,
13:43
Speaker 1: the oil inventory of China barely draw down.
13:47
Speaker 2: You know.
13:48
Speaker 1: They China still have one point four billion barrels of
13:51
Speaker 1: oil in oil in the Strategic Oil Reserve. And China
13:56
Speaker 1: had plenty of fertilizers because Chinese, Chinese fertilizers are not
14:01
Speaker 1: made for natural gas like most of the war that
14:03
Speaker 1: are made through cod to gasification process. And that means
14:09
Speaker 1: the Chinese farmers that which they just had their spring harvest,
14:13
Speaker 1: they had no problem accessing fertilizer like many farmers around
14:22
Speaker 1: the world. So China will be well supplied, well stocked.
14:27
Speaker 1: Their their strategy of energy diversification into sustainable energy as
14:33
Speaker 1: well as hydro a nuclear has really paid off. Yeah,
14:40
Speaker 1: you know, in combined with their huge push free electricification.
14:44
Speaker 1: Some say China is now it's going to be the
14:47
Speaker 1: world's first electrical state. And so I expect that also
14:52
Speaker 1: to continue. But I did, I did mention, I did
14:56
Speaker 1: remember you mentioned something about China's cold to code to
15:02
Speaker 1: oil industry that would become viable provided if the price
15:09
Speaker 1: remains above certain level like step seventy five dollars.
15:12
Speaker 2: Prepare or something like that.
15:15
Speaker 1: You think that that industry now will still be able
15:19
Speaker 1: to sustain yourself well so.
15:23
Speaker 3: Long as the prices are high. Comparatively speaking, it had
15:26
Speaker 3: the market right. The interesting thing about the Chinese experience is,
15:30
Speaker 3: as you say, China has been incredibly well prepared for
15:33
Speaker 3: eventualities like this. And they've been well prepared not only
15:37
Speaker 3: because they've got large inventories of crude oil available, both
15:42
Speaker 3: in terms of known public reserves, but more than likely
15:46
Speaker 3: there are other reserves as well as well as commercial reserves.
15:49
Speaker 3: They've barely been touched. We also know that China has
15:54
Speaker 3: been able to cope incredibly well because, in fact, Chinese
15:58
Speaker 3: imports of crude from the global market has fallen substantially
16:01
Speaker 3: in the last three months, but the Chinese economy has
16:04
Speaker 3: not been as severely affected as you would otherwise believe
16:09
Speaker 3: with such a reduction include all imports. In other words,
16:13
Speaker 3: the Chinese economy is not as dependent on oil imports
16:16
Speaker 3: as many people, I think would initially want to believe.
16:22
Speaker 3: I've mentioned this on many occasions now, but if this
16:26
Speaker 3: happened twenty five years ago, I think the situation would
16:28
Speaker 3: be very different. But the idea of the Malacca dilemma.
16:34
Speaker 3: As herjinaw put it back in two thousand and three,
16:38
Speaker 3: the concern that Chinese energy supplies from the Middle East
16:43
Speaker 3: would be curtailed by virtue of interdictions at the Strait
16:48
Speaker 3: of Malacca led China ultimately to make incredible efforts to
16:53
Speaker 3: be prepared through diversification, through domestic capability development as well
16:59
Speaker 3: as through the element of these reserves, and of course
17:02
Speaker 3: through the diversification of import sources as well. So a
17:05
Speaker 3: lot of Chinese effort over the course of this period
17:08
Speaker 3: of time has gone towards its diplomatic efforts across the
17:12
Speaker 3: Eurasian Continent, into Russia, into Central Asia. So China's very
17:17
Speaker 3: very well prepared. The second thing I think we can
17:20
Speaker 3: say about China is that, in fact, had it not
17:22
Speaker 3: been for China's preparedness and its ability to reduce its
17:26
Speaker 3: imports from the market whilst at the same time maintaining
17:30
Speaker 3: a steady ship economically, the prices that we would have
17:33
Speaker 3: seen globally would have been much higher. So China's preparedness
17:37
Speaker 3: actually saved much of the industries of the world who
17:42
Speaker 3: would have really hit the wall had prices gone over
17:44
Speaker 3: one hundred and twenty one hundred and thirty dollars. The
17:47
Speaker 3: fact that they didn't in large part is due to
17:50
Speaker 3: China's ability to do what it did. That leads to
17:55
Speaker 3: a third important observation, and that in fact, China is
17:59
Speaker 3: now a paradoxically a global energy power because China's ability
18:06
Speaker 3: to modulate its demand for global oil means it is
18:10
Speaker 3: in a position to affect global oil prices, and we've
18:13
Speaker 3: seen that, and so anybody who I think works on
18:17
Speaker 3: the assumption that China is vulnerable to energy interdictions in
18:27
Speaker 3: many ways haven't brought their assessments up to date with
18:30
Speaker 3: actually the structure of the global market, the distribution of
18:34
Speaker 3: natural resources, the chemical variations across different sources of oil,
18:41
Speaker 3: and ultimately also China's own restructuring and the nature of
18:46
Speaker 3: energy within China's own economic structure. China is in addition
18:52
Speaker 3: to amount of affect oil prices, China is obviously the
18:56
Speaker 3: spear carrier for electrification, not only of itself but also
19:02
Speaker 3: enabling other countries to do so. You mentioned electric vehicles,
19:06
Speaker 3: but the next frontier is going to be trucks, and
19:11
Speaker 3: we're seeing significant growth already in electric trucks in China,
19:16
Speaker 3: and they will continue to expand globally as well. So
19:18
Speaker 3: we're going to move from a situation where people are
19:22
Speaker 3: being moved by electric vehicles to where goods are being
19:25
Speaker 3: moved by electric trucks. And we have also seen, I
19:28
Speaker 3: think this is still early days, the realization of electric
19:35
Speaker 3: and hybrid ocean container vessels. These aren't big ones. We're
19:41
Speaker 3: talking about container vessels that carry about seven hundred and
19:44
Speaker 3: twenty containers, which is very small compared to the fifteen
19:47
Speaker 3: thousand that ply the sort of major sea routes. But
19:52
Speaker 3: what this means is that a whole bunch of estuary
19:57
Speaker 3: base and coastal based shipping, as well as into ireland
20:01
Speaker 3: shipping in places like the Pacific, will actually be something
20:05
Speaker 3: that can be undertaken with electrified marine transport as well.
20:11
Speaker 3: There's a bunch of very interesting developments in the air
20:15
Speaker 3: transport space. Obviously, long haul transport still relies on jet fuel,
20:20
Speaker 3: but short haul transport is increasingly moving towards electric powered
20:24
Speaker 3: drones and also hydrogen powered drones. So solid state batteries
20:30
Speaker 3: are starting to feature in drones. And I'm not talking
20:35
Speaker 3: about those little drones that we throw into the sky
20:37
Speaker 3: to take nice pictures, but serious drones that can carry
20:41
Speaker 3: hundreds of kilograms of hayload, you know, whether it's for
20:46
Speaker 3: delivering or picking up and cultural products that are being
20:49
Speaker 3: harvested in remote parts of China, or we're talking about
20:54
Speaker 3: being able to move decent sized payloads in urban environments.
20:58
Speaker 3: We're going to see the electrification air transport as well.
21:04
Speaker 1: Yeah, speaking of which, you know, I I first heard
21:07
Speaker 1: of the term low altitude of economy, uh, you know,
21:11
Speaker 1: coming out of China, and I at first I was
21:14
Speaker 1: not sure how uh you know, I don't even know
21:18
Speaker 1: knew what that means. But pretty soon I saw the
21:21
Speaker 1: proliferation of the drones, I thought, okay, wow, China they
21:25
Speaker 1: really saw a space opening up in this case, they
21:30
Speaker 1: kind of foresaw this. Uh this this this new new frontier,
21:36
Speaker 1: and a lot of the Chinese companies are jumping on it.
21:39
Speaker 1: And this again is made possible by advancement in the
21:43
Speaker 1: battery technology, which the Chinese company also dominate. Uh you know,
21:48
Speaker 1: they they are very quickly revolutionalized. For example, you as
21:52
Speaker 1: you mentioned solid state batteries, uh and and and I
21:56
Speaker 1: al saw saw they're also putting into production now sodium
22:01
Speaker 1: ion battery, which would be much much cheaper this all
22:04
Speaker 1: allowed the storage of energy to be much much cheaper
22:08
Speaker 1: to you know.
22:09
Speaker 2: On one hand, it makes you made a lot.
22:12
Speaker 1: Of the UH green energy project more sustainable, for example,
22:17
Speaker 1: like solar wind. When UH, sometimes your energy source is
22:21
Speaker 1: not stable, you need often you need backup generators, UH
22:26
Speaker 1: backup by colpower planting or able to provide steady electricity.
22:30
Speaker 1: But now you you know, once you have a lot
22:34
Speaker 1: of bad cheap batteries, you can store a lot of
22:38
Speaker 1: these solar wind power generated during the peak hours and
22:42
Speaker 1: have them redistributed through the grid during the off hours.
22:46
Speaker 2: And and and.
22:47
Speaker 1: You also make stuff like the long haul electric truck possible.
22:52
Speaker 1: It wasn't possible before just because the battery technology was
22:56
Speaker 1: not there. Now now I think we are you know,
22:59
Speaker 1: we're going to see advancement of all these.
23:03
Speaker 2: Fronts very very quickly.
23:05
Speaker 1: And you know, one thing China is very good at
23:08
Speaker 1: doing is uh they take a new technology and commodify it,
23:14
Speaker 1: you know, make it make it so affordable that it
23:16
Speaker 1: can show up everywhere. And I'm fairly optimistic in that.
23:22
Speaker 1: What other uh, you know, you actually wrote some interesting
23:27
Speaker 1: articles lately for your sub stack. Would you like to
23:30
Speaker 1: talk about that?
23:33
Speaker 3: Well, I'm glad you thought that they were interesting. Maybe
23:38
Speaker 3: others do too. Look, I've in pursuing a line of
23:42
Speaker 3: work that really builds on I guess where my book
23:45
Speaker 3: left off in part, so the last books, themo Economics
23:48
Speaker 3: in a Time of Monsters was much more focused on
23:52
Speaker 3: macroeconomic a way of thinking about the macroeconomic structure ground
23:59
Speaker 3: in a substrate of thermoeconomic foundations. But the book also
24:06
Speaker 3: didn't do many things as well. And one of the
24:09
Speaker 3: areas that I've been particularly interested in is how economic efficiency,
24:16
Speaker 3: if you will, actually materializes in particular nodes within the
24:21
Speaker 3: economic system, and how the work in laboratories in particular
24:27
Speaker 3: is leading to the ability of the economic organism, if
24:32
Speaker 3: you will, to discover new pathways to high energy return
24:37
Speaker 3: on energy invested. And once you start to unpack all
24:43
Speaker 3: of this, you start to realize that there are many
24:48
Speaker 3: things that happen many years before they become apparent to
24:52
Speaker 3: most of us that ultimately determine the fates of nations.
24:57
Speaker 3: So you know, many people today talk about, for example,
25:01
Speaker 3: China's dominance of the rare earth elements marketplace or the
25:04
Speaker 3: critical minerals marketplace, and how that is a significant part
25:08
Speaker 3: of China's ability to deal with external threats. It's partly
25:13
Speaker 3: China's leverage, right, but for that to have actually become
25:19
Speaker 3: something relevant, if you actually wind the clock back two,
25:22
Speaker 3: three or four decades, you start to realize what efforts
25:26
Speaker 3: had to be put in from a research and development
25:29
Speaker 3: point of view, from a scientific discovery and experimentation perspective,
25:33
Speaker 3: that ultimately created the conditions for that to happen. So
25:37
Speaker 3: a lot of the work that I've been doing of
25:39
Speaker 3: late is to go back into the material sciences, whether
25:43
Speaker 3: it's in the chemical sciences or new materials, and try
25:49
Speaker 3: to understand how that well, the things that I'm interested
25:54
Speaker 3: in anyway, are part of a broader effort to proove
26:01
Speaker 3: energy return on energy invested at a systemic level, and
26:04
Speaker 3: there are many examples of this taking place, whether it's
26:08
Speaker 3: in better ways of harnessing the energy of nature, whether
26:13
Speaker 3: there are better ways of storing the energy that's been harnessed,
26:20
Speaker 3: and of course even better ways of utilizing energy so
26:23
Speaker 3: that there is less waste or at least the ability
26:26
Speaker 3: to recover that waste and make use of it. So,
26:30
Speaker 3: you know, for people who are actually interested in that
26:33
Speaker 3: pretty science heavy part of geopolitics. I think some of
26:41
Speaker 3: the things that I've been doing of late are quite interesting.
26:44
Speaker 1: Now.
26:44
Speaker 3: I should say, though, that my own background isn't in
26:47
Speaker 3: the hard sciences, but I've been fortunate that I get
26:50
Speaker 3: to work with teams of hard science academic researchers, whether
26:56
Speaker 3: they're in chemistry, as I said, or whether they're in
27:00
Speaker 3: new materials, and I've been fortunate enough to benefit from
27:04
Speaker 3: their expertise and become a lot more immersed in why
27:09
Speaker 3: the work of a laboratory is actually central to the
27:14
Speaker 3: geopolitical dimensions that we currently live through today. You know,
27:18
Speaker 3: oil is a great little example, actually. You know, the
27:21
Speaker 3: chemical composition of oil from the Middle East is very
27:23
Speaker 3: different from the chemical composition of oil from from the
27:27
Speaker 3: United States, for example, and that matters, It actually matters.
27:30
Speaker 3: It's not all the same. And once you start to
27:33
Speaker 3: understand how these things matter, and how they get used
27:37
Speaker 3: in different applications, and how some oils are better for
27:41
Speaker 3: creating diesel than others, you actually appreciate that. You know,
27:48
Speaker 3: the sort of sweeping narratives that you often get in
27:52
Speaker 3: geopolitical discourse about so and so trying to be an
27:56
Speaker 3: energy controller or an energy hegemon, or blocking China's access
28:01
Speaker 3: to energy. Energy is actually a far more complex and
28:05
Speaker 3: fragmented phenomenon than any of those discourses would imply, And
28:13
Speaker 3: the more we appreciate that, the more we're actually able
28:16
Speaker 3: to appreciate. Firstly, how difficult it is to just sort
28:20
Speaker 3: of block access to things, because there are workarounds, and
28:24
Speaker 3: not all energy or not all oil times, for example,
28:28
Speaker 3: are equivalent to others. But it also tells us why
28:31
Speaker 3: states that focus energy and effort on research and development,
28:36
Speaker 3: on fundamental science, on developing and discovering new materials, pushing
28:44
Speaker 3: the boundaries, on the application of new materials, et cetera,
28:47
Speaker 3: et cetera, are better placed to prevail in their own
28:53
Speaker 3: ambitions than states that aren't.
28:56
Speaker 2: So, states that.
28:59
Speaker 3: Don't make these sorts of commitments and become trapped in
29:03
Speaker 3: older paradigms ultimately confront the reality that nature's own entropic
29:11
Speaker 3: tendencies will grab you and not let you go. So
29:17
Speaker 3: there's some interesting stuff there. The other thing that I
29:19
Speaker 3: think some of your viewers might find interesting also is
29:24
Speaker 3: some thinking around how supply chains work and how supply
29:27
Speaker 3: chains actually propagate or absorb shocks. Right, And obviously we've
29:33
Speaker 3: been watching one sort of shots, and we've discussed that
29:36
Speaker 3: earlier the shocks in terms of the shortages coming out
29:41
Speaker 3: of the Middle East, but we've actually need to have
29:44
Speaker 3: better ways of thinking about how shocks work through systems,
29:49
Speaker 3: and why systems can become resilient to shocks or fragile
29:56
Speaker 3: and at risk of shocks in a sense knocking them
30:00
Speaker 3: off their path and forcing them onto pathways that they
30:05
Speaker 3: find difficult to get out of, you know, basically knocking
30:08
Speaker 3: them into energetic ruts for example, that lead them down
30:14
Speaker 3: pathways where economic complexity diminishes, their ability to harness energy diminishes,
30:20
Speaker 3: which ultimately impairs their ability to sustain industry and the
30:25
Speaker 3: livelihoods that come from it. So, you know, the whole
30:28
Speaker 3: bunch of those sorts of things that I guess are
30:30
Speaker 3: coalescing together in my own mind and where I can
30:34
Speaker 3: I try and share those on substack a little bit
30:38
Speaker 3: science oriented. Look, it's great from my point of view
30:40
Speaker 3: because it gets me back into things that was a
30:43
Speaker 3: bit unfamiliar territory. And I don't know about you, but
30:49
Speaker 3: it's confronting the new stuff that well new for me
30:54
Speaker 3: is what makes all of this engaging and interest sting.
31:01
Speaker 3: But Ultimately, I think the the unsung heroes often the
31:07
Speaker 3: people working in laboratories trying to figure some of these
31:12
Speaker 3: things out.
31:14
Speaker 2: But worried Worrick.
31:15
Speaker 1: Let's let's let's return back to some real life examples.
31:19
Speaker 1: You know, some of the When you mentioned states who
31:22
Speaker 1: are stuck in the old paradigm, for some reason, immediately
31:26
Speaker 1: came to mind with the United States. US is basically
31:31
Speaker 1: doubled down on its status as a petrol state under
31:35
Speaker 1: Donald Trump's administration.
31:37
Speaker 2: On some level, it makes sense because.
31:44
Speaker 1: Because US is actually a large oil and gas producer
31:48
Speaker 1: right now, and so why not lean on your own advantage?
31:52
Speaker 1: Right and uh, and and so it is that really
31:59
Speaker 1: to the disadvantag teacher of the United States? And and
32:01
Speaker 1: and before you answer and now right now, Donald, I
32:05
Speaker 1: wouldn't I would? I know Trump himself would say I
32:09
Speaker 1: have been validated because the stock market is at all
32:13
Speaker 1: time high in the US. In fact, you know, the
32:18
Speaker 1: US stock market has pretty much sucked the oxygen out
32:22
Speaker 1: of the global liquidity at this moment.
32:25
Speaker 2: Uh.
32:25
Speaker 1: You know, the US dollar is actually appreciated in value
32:29
Speaker 1: against many Asian many currencies around the world, particularly Asian currency.
32:35
Speaker 1: I think the only exception is the Chinese currency R
32:38
Speaker 1: and B, which is actually appreciating against the US dollars,
32:42
Speaker 1: but against everything else. You whether Japanese, Yan, koreaing Wong,
32:47
Speaker 1: Indonesian rupia, Filipino pestos, uh, Indian rupee, West dollar is
32:55
Speaker 1: insanely strong right now.
32:57
Speaker 2: Uh.
32:57
Speaker 1: You know, I know Trump will point that as validation
33:00
Speaker 1: of his own policy.
33:02
Speaker 2: What do you say to that?
33:04
Speaker 3: Well, you know, when we often ask the question about
33:07
Speaker 3: the benefits and the disbenefits, there is a temptation, particularly
33:12
Speaker 3: from a sort of a more Western philosophical perspective, a
33:15
Speaker 3: duellist perspective, to view these things as either ors. But
33:21
Speaker 3: I think you've touched on the fact that in fact
33:24
Speaker 3: benefits and disbenefits can coexist. It really just depends on
33:28
Speaker 3: who we're talking about and what durations of time we're
33:32
Speaker 3: talking about. The United States does have an abundance of
33:36
Speaker 3: oil and gas. We know that from geological surveys. But
33:42
Speaker 3: we also know that the energy cost of extracting that
33:46
Speaker 3: raw material is increasing all the time, and that the
33:50
Speaker 3: longevity of highly efficient fields, particularly for its fracking, is
33:58
Speaker 3: diminishing year on year. So, in a sense, whilst there
34:01
Speaker 3: is an abundance of material in nature. The cost of
34:06
Speaker 3: extracting that is increasing continually, which makes it ultimately a
34:13
Speaker 3: reducing energy return on energy invested proposition. That's your long
34:17
Speaker 3: run structural thermoeconomic downside. The upside in the short term
34:23
Speaker 3: is that there is an abundance of raw material that
34:28
Speaker 3: can can enable the enrichment of those industries that have
34:33
Speaker 3: access to it, and so it generates a financial wealth,
34:39
Speaker 3: but at the expense of accelerating the declining systemic wide
34:47
Speaker 3: energy resin on energy invested situation for the US economy.
34:51
Speaker 3: So financially great today for some, not so great for others.
34:56
Speaker 3: We know, for example, that gas prices at the pump
34:59
Speaker 3: of been going up in some states, hitting over I
35:04
Speaker 3: think from memory about eight dollars a gallon, but averaging
35:07
Speaker 3: around four dollars ish a gallon. You know that's quite high,
35:11
Speaker 3: and you know it really does hit you know, many
35:15
Speaker 3: Americans very very hard. So you know, where there are
35:19
Speaker 3: winners in these distributional games, there are also losers in
35:22
Speaker 3: these distributional games. But if I brought a thermoeconomics lends
35:27
Speaker 3: to this story, I would say that that the acceleration
35:31
Speaker 3: of reduced energy return on energy invested is the long
35:34
Speaker 3: term price or the medium term price that the US
35:37
Speaker 3: pays for short term financial largess. What you know. So
35:43
Speaker 3: that's that's a very practical piece. Attempts to electrify or
35:47
Speaker 3: expand the electrification of the US economy in response mainly
35:51
Speaker 3: to what's happening with electricity demand from AI is running
35:56
Speaker 3: into a whole bunch of barriers as well. Look when
36:00
Speaker 3: you look at the data over the course of the
36:01
Speaker 3: last twenty odd years, you see that energy capacity or
36:06
Speaker 3: electricity capacity more specifically in the US has been relatively flat.
36:12
Speaker 3: The United States has not been adding much more capacity
36:15
Speaker 3: in net terms over that last two decades, but in
36:19
Speaker 3: more recent years it's had a need to add substantially
36:23
Speaker 3: to its capacity, both in terms of generation, but more
36:27
Speaker 3: importantly in terms of distribution through the poles and wires network.
36:31
Speaker 3: And there are constraints. The ability to augment the poles
36:38
Speaker 3: and wires networks with substations and new towers new wires
36:43
Speaker 3: is literally hitting the wall because of shortages of available materials,
36:48
Speaker 3: available equipment, and available skilled labor. And it is having
36:53
Speaker 3: material consequences with delays or cancelations of data center projects.
37:01
Speaker 3: Not to mention the fact that the location of data
37:03
Speaker 3: center projects is running into their own political headwinds as well,
37:07
Speaker 3: with many communities not wanting data centers to be built
37:10
Speaker 3: in their areas, partly because of concerns that when they
37:13
Speaker 3: do get built, they cause electricity prices within local markets
37:17
Speaker 3: to rise. Now, as local markets experience rising electricity prices, households,
37:22
Speaker 3: of course are put under pressure, but some are other
37:26
Speaker 3: industries that use the electricity, and so the rapid expansion
37:33
Speaker 3: of AI data centers is creating what we would call
37:37
Speaker 3: a Dutch disease effect, which is that it sucks resources
37:41
Speaker 3: towards the AI center at the expense of the other
37:45
Speaker 3: sectors of the economy, with downsides as well. So winners
37:49
Speaker 3: winners are the stockholders of listed AI companies, and those
37:56
Speaker 3: who are experiencing the downside of these data are households,
38:01
Speaker 3: particularly lower income households, for whom a large proportion of
38:06
Speaker 3: their household budget is committed to staples like electricity and
38:11
Speaker 3: other industries who can't do much about it. You know,
38:13
Speaker 3: they're stuck with needing electricity from the grid and that's
38:17
Speaker 3: getting more expensive. So you know, these are some of
38:20
Speaker 3: the practical dynamics of these energetic questions, if you will,
38:25
Speaker 3: But also how they intersect with with the financial markets.
38:29
Speaker 3: So stockholders, you know, are doing well. More liquidity is
38:34
Speaker 3: going into the stock market and that's driving up valuations.
38:38
Speaker 3: At the same time, oil executives are doing well. At
38:43
Speaker 3: the same time, the military industrial complex is generating profits
38:46
Speaker 3: that it's probably never seen, you know, for many decades.
38:49
Speaker 3: They're doing very, very well. But in distributional games where
38:54
Speaker 3: there is a winner like this and where growth itself
38:57
Speaker 3: is relatively moderate, the majority of any growth that is
39:01
Speaker 3: taking places being stiffled up by a relatively small small
39:04
Speaker 3: group of people or a minority of people.
39:08
Speaker 1: Well, I know to that, I know people on on
39:12
Speaker 1: Twitter or x would say, well, yes, there's some problems,
39:15
Speaker 1: but America will innovate out of it because US, with
39:19
Speaker 1: its unique system of venture capital, of funneling billions of
39:25
Speaker 1: dollars to Silicon Valley, will generate. Uh will have that
39:31
Speaker 1: special magic eglixir to create innovation. You know, they will
39:36
Speaker 1: point to example of Elon Musk, you know, like who
39:39
Speaker 1: created Tesla and now created space X made him a
39:44
Speaker 1: Troyonaires pointed that as example of American innovation that can
39:50
Speaker 1: go from zero to one, right like that, that that
39:53
Speaker 1: that what will what will bring open a new frontier
39:57
Speaker 1: and and that makes a similar argument, by the way,
40:00
Speaker 1: also for AI, the investment into AI. They're saying like,
40:04
Speaker 1: once we have AGI, you have you know, the you
40:09
Speaker 1: have a bunch of PhDs that can basically you have
40:12
Speaker 1: equivalent of a bunch of PhD that can work for
40:20
Speaker 1: non stop twenty four to seven with no sleep, no
40:22
Speaker 1: bathroom breaks, and they can train other AI that can
40:25
Speaker 1: train other PhDs and very soon, you know, abundance, super abundance.
40:32
Speaker 2: What do you say to that.
40:34
Speaker 3: Well, look, innovation is part and parcel of the human condition, right,
40:39
Speaker 3: and humans, wherever they have over the centuries, address the
40:45
Speaker 3: problems that they face in different ways, sometimes in ways
40:48
Speaker 3: that I'm all out of the box, and at other times.
40:51
Speaker 3: The United States does go through periods where it has
40:55
Speaker 3: addressed the problems that it confronts. And there is always
40:58
Speaker 3: a possibility that, you know, creative people will find answers
41:05
Speaker 3: to problems. That's the upside, right, They're not the only
41:09
Speaker 3: place in the world that does that, but certainly, I
41:12
Speaker 3: think if I was asked to nominate something about the
41:19
Speaker 3: United States and how it may be able to tackle
41:23
Speaker 3: some of these sorts of problems, I would say that
41:25
Speaker 3: it certainly does have a capacity. It's a big population
41:30
Speaker 3: actually still a lot of well educated people, creative people,
41:34
Speaker 3: and there is a chance of being able to think
41:36
Speaker 3: through these sorts of issues, but there are still material constraints.
41:40
Speaker 3: One can dream up these sorts of solutions, and no
41:44
Speaker 3: doubt many have, but you've still got to be able
41:46
Speaker 3: to have access to the raw materials to bring them
41:49
Speaker 3: to reality. And it's accessing some of those raw materials
41:54
Speaker 3: that will take time.
41:57
Speaker 1: You know.
41:57
Speaker 3: I've said on many occasions that should the United States
42:01
Speaker 3: make importing cheap things from China very expensive or literally
42:08
Speaker 3: reduced or cut imported goods from China, whether they're finished
42:12
Speaker 3: products or more importantly capital goods and intermediate goods, well,
42:17
Speaker 3: it will have an effect on the United States economy,
42:19
Speaker 3: which may take anywhere from five to ten years for
42:23
Speaker 3: alternatives to be developed. But there's no in principle reason
42:27
Speaker 3: why these alternatives could not be developed. The structural constraints
42:32
Speaker 3: on that, aside from this question of being to have
42:35
Speaker 3: access to raw materials, is whether or not finance capital
42:40
Speaker 3: will mobilize in behind these activities as opposed to other things.
42:45
Speaker 3: And the reason why the United States is in the
42:47
Speaker 3: position that it's in it today structurally speaking, is because
42:53
Speaker 3: financialization has tilted the American economic system away from many
43:00
Speaker 3: of these sorts of activities, the development of the material industries,
43:05
Speaker 3: commitments to material sciences, the ongoing education of the next
43:09
Speaker 3: cohort of relevantly skilled people, et cetera, et cetera. Now,
43:15
Speaker 3: you don't get any of that happening overnight unless you're
43:18
Speaker 3: willing to open up the borders and enable people with
43:22
Speaker 3: those skills to come into the country. At the moment,
43:26
Speaker 3: that's something that the country seems to me anyways, a
43:28
Speaker 3: little bit hostile towards. So you know, these are the barriers,
43:34
Speaker 3: if you will, that the United States is needing to address,
43:39
Speaker 3: whilst at the same time being optimistic about the innovative
43:43
Speaker 3: and the creative potential of the country and its people.
43:47
Speaker 3: My own view has been for a long time that
43:50
Speaker 3: unless Wall Street is essentially brought to heel, it will
43:55
Speaker 3: always ironically be a drag on the capacity of these
43:58
Speaker 3: other parts of the economic system to rediscover the mojo.
44:06
Speaker 1: Well said, Now, I want to return back to kind
44:10
Speaker 1: of the geopolitical fallout of the war.
44:14
Speaker 2: You know, assuming the war.
44:16
Speaker 1: Is wrapped up Uh does this if if we if
44:21
Speaker 1: the the mo U are to be signed this Friday,
44:25
Speaker 1: and if if he help through the sixty days, do
44:29
Speaker 1: you think we can return back to the international security
44:34
Speaker 1: structures pre war? What I mean is, you know, can
44:38
Speaker 1: the American Empire go on as they did before? You know,
44:41
Speaker 1: like there's a lot of basic premises of the American
44:45
Speaker 1: imperial system that got challenged during the war in the
44:49
Speaker 1: Persian Gulf.
44:49
Speaker 2: You know.
44:50
Speaker 1: One is that the United States will provide a security
44:54
Speaker 1: umbrella to its allies.
44:56
Speaker 2: Uh.
44:57
Speaker 1: And that that that by stationing American basis on your
45:01
Speaker 1: soil make you safer. Uh. You know those basically we're
45:06
Speaker 1: gong within the first missile and joan attack of Iran,
45:11
Speaker 1: and and and the other thing is that America now
45:15
Speaker 1: expect more uh its ally to share shoulder more of
45:20
Speaker 1: the financial burdens of sustaining its empire.
45:24
Speaker 2: You know, like it.
45:27
Speaker 1: Ranging from Europe to Asia to Australia. The United States
45:31
Speaker 1: is turning into more an extracted, extractive model, uh tour
45:37
Speaker 1: it's it's its vassal states. What would would United States
45:42
Speaker 1: continue to carry on like that?
45:44
Speaker 2: Uh? Did anything change after the war?
45:49
Speaker 3: Well, I think people's understanding of the material limitations of
45:53
Speaker 3: the the US hegemonic empire has crystallized. So in that sense,
46:01
Speaker 3: there has been a change, and that has been underpinned,
46:05
Speaker 3: as you suggest, by the observed reality that the Americans,
46:12
Speaker 3: with the abilities that they have and the capacities that
46:14
Speaker 3: they have, simply cannot sustain the defense of military bases
46:20
Speaker 3: forward bases in far flung parts of the world, and
46:24
Speaker 3: that American infrastructure and American equipment is ultimately at risk.
46:33
Speaker 3: It also means that countries that play host to this
46:36
Speaker 3: kind of infrastructure can no longer depend upon American presence
46:42
Speaker 3: as a protecting capability. Rather, the presence of American bases
46:49
Speaker 3: makes you a target. We've seen that. So that's the
46:52
Speaker 3: first thing that I think has happened. The second thing
46:55
Speaker 3: that is materially different is that we now have natively
47:00
Speaker 3: a new player at the seat of major powers in
47:05
Speaker 3: the world, and that is Iran. There will be academic debates,
47:10
Speaker 3: I guess, around whether or not Iran is a global power,
47:15
Speaker 3: and certainly in many ways it's not a global power
47:18
Speaker 3: and the way that China is, or the United States is,
47:22
Speaker 3: or even Russia is, particularly with its nuclear arsenal. But
47:27
Speaker 3: I don't think that there's much doubt that Iran has
47:30
Speaker 3: emerged from this war so far as a great regional power.
47:36
Speaker 3: There is going to be a new regional architecture. Clearly
47:42
Speaker 3: that's not going to happen simply over sixty days. These
47:45
Speaker 3: things take time, even if some of the core parameters
47:49
Speaker 3: might get drafted and discussed over the period of the
47:52
Speaker 3: next couple of months. But a new security architecture is
47:56
Speaker 3: going to be one that will require Iran to be
48:00
Speaker 3: at the table. So you're not going to get the
48:03
Speaker 3: world as it was before the war. Now, whether Israel
48:08
Speaker 3: is going to be able to live with that, and
48:11
Speaker 3: whether the domestic political forces in Israel will push against that,
48:15
Speaker 3: and whether they get the green light from parts of
48:18
Speaker 3: the American establishment, remember for whom the Israel project has
48:22
Speaker 3: been part of an American foreign policy and American interest in
48:24
Speaker 3: the region for the past so many decades. I think
48:28
Speaker 3: that remains an open question. But these are some of
48:32
Speaker 3: the material changes. We also know because of the understanding
48:37
Speaker 3: of the unviability of defending American bases, plus the shortage
48:42
Speaker 3: of American munitions that has become evident, together with the
48:46
Speaker 3: limitations of American supply chains to replenish those in a
48:49
Speaker 3: short space of time that bases in other parts of
48:52
Speaker 3: the world are similarly vulnerable, and that is causing strategic thinkers, policymakers, politicians,
49:00
Speaker 3: civil society right across Asia in particular to be thinking
49:05
Speaker 3: very very hard about whether or not the future of
49:10
Speaker 3: their own region security can rely upon the idea of
49:14
Speaker 3: this network of American forward bases. Clearly they can't. We're
49:19
Speaker 3: having this debate in Australia now occasioned by the announcements
49:24
Speaker 3: on the Orcat submarine rejigging of the arrangements, but these
49:29
Speaker 3: debates are taking place right across Asia, you know, whether
49:33
Speaker 3: it's in Japan, where Japan is seeking to I think
49:36
Speaker 3: thread thread the needle, or walk a very fine line
49:40
Speaker 3: between their own ambitions to be more muscular and autonomous
49:45
Speaker 3: within the region, fearing that the Americans will become less
49:52
Speaker 3: meaningful regionally, but at the same time wanting to be
49:54
Speaker 3: seen to be a loyal American ally. South Korea is
49:59
Speaker 3: undergoing a siml a kind of discussion where they're developing
50:03
Speaker 3: more of their domestic capabilities, understanding again that Washington is
50:07
Speaker 3: not going to put at risk any American city in
50:10
Speaker 3: the defensive soul. I think the only people who have
50:13
Speaker 3: yet to really internalize the consequences of the American defeat
50:18
Speaker 3: in the Middle East is other folk in the Philippines,
50:23
Speaker 3: where the administration of Marcos Junior administration remains very committed
50:28
Speaker 3: to the idea of being tied to the United States,
50:32
Speaker 3: but there is local opposition to that as well. The
50:40
Speaker 3: situation on Taiwan Island, I think has become more fluid
50:44
Speaker 3: than it has been for a long time. There's clearly
50:47
Speaker 3: some desperation both in Washington and amongst certain sections of
50:51
Speaker 3: the taipeaid body politic that is seeking to hold the
50:55
Speaker 3: Americans in pushing hard for the signing off on the
51:01
Speaker 3: export deals. You know, fourteen billion dollars worth of exports
51:05
Speaker 3: of military exports to Taipei which have been held up.
51:09
Speaker 3: But there's a debate now going on, and there's a
51:11
Speaker 3: shift in public opinion. You know, I wouldn't quite call
51:15
Speaker 3: it a mad rush to embrace reunification, but I'd certainly
51:20
Speaker 3: say that whatever momentum there was towards some kind of
51:26
Speaker 3: passive independence I think has been dealt a very severe
51:31
Speaker 3: blow and many people on the island are having very
51:34
Speaker 3: serious second thoughts, including politicians and other decision makers. So
51:39
Speaker 3: these are some of the reality. So the world isn't
51:41
Speaker 3: going to go back to the way that it was. Now,
51:43
Speaker 3: what's going to happen? Well, you know, the United States
51:46
Speaker 3: isn't going to sit around and go, oh, well, you know,
51:48
Speaker 3: I guess we can just recalibrate our ambitions and maybe
51:53
Speaker 3: just be one amongst equals. I don't think the US
51:58
Speaker 3: political culture has reached that point of realization. So the
52:04
Speaker 3: displacement anxiety that's evident today is leading to a bunch
52:09
Speaker 3: of violence and lashing out. And there's every likelihood and
52:12
Speaker 3: I think we've discussed this before, where in fact, the
52:15
Speaker 3: United States will pursue a broad range of multi dimensional
52:23
Speaker 3: acts of violence and warfare and pressure on everyone else
52:28
Speaker 3: in the world in the hopes of clinging on to
52:31
Speaker 3: what it's got. So, you know, the decline of the
52:35
Speaker 3: American Empire is not a one dimensional process, you know.
52:40
Speaker 3: And I think economically it's got its own challenges, as
52:43
Speaker 3: we've discussed. Militarily, I think it's hit some very very
52:46
Speaker 3: serious challenges now, but it still has numerous resources across
52:50
Speaker 3: the globe. And it's certainly at this stage culturally speaking
52:53
Speaker 3: and mentality wise, is not ready to become what I
52:59
Speaker 3: would call or to become a normal great nation.
53:06
Speaker 1: While said, well, said anything else you would like to cover,
53:11
Speaker 1: doctor Pu, Well, I just.
53:14
Speaker 3: Wish that we've got to have a fortnite where maybe
53:18
Speaker 3: we had much less to talk about, because if that
53:21
Speaker 3: was the case, and maybe we'd all get a chance
53:24
Speaker 3: to have a bit of a breather. I do understand,
53:27
Speaker 3: by the way, from some colleagues of mine who have
53:30
Speaker 3: been visiting baliaflate that and this goes to this issue
53:35
Speaker 3: of the devaluation of various Asian currencies, that there are
53:40
Speaker 3: some real headwinds in various Asian economies. And I hope
53:46
Speaker 3: that these headwinds can be sort of contained, because the
53:53
Speaker 3: last thing the Asian region needs is is further disruptions.
54:00
Speaker 3: You know, I remember back to when the Asian financial
54:03
Speaker 3: crisis unfolded in nineteen ninety seven, and a lot of
54:12
Speaker 3: that was catalyzed by a liquidity crisis in places like Indonesia.
54:18
Speaker 3: Indonesia actually needed to gain liquidity support from the IMF,
54:24
Speaker 3: and arrangements were put into place after the Asian Financial
54:28
Speaker 3: Crisis by some of the major economies, you know, China
54:32
Speaker 3: and Japan, South Korea to assist the region overall in
54:37
Speaker 3: dealing with liquidity crisis. But I am a little bit
54:40
Speaker 3: concerned that not only do we have a liquidity crisis
54:43
Speaker 3: impacting Indonesia, but as a result of some of the
54:47
Speaker 3: economic consequences of a devaluating dollar inflation, et cetera, that
54:54
Speaker 3: local economic conditions will be ripe for or for American interventions.
55:02
Speaker 3: I guess let's not forget that. Scott Bessett. Earlier this year,
55:07
Speaker 3: I bragged about how the United States strangled availability of
55:12
Speaker 3: dollars into Iran, which of course has been doing for
55:14
Speaker 3: a long time, but which actively contributed through American policy interventions,
55:19
Speaker 3: to rising inflation. And ultimately, on the back of that,
55:25
Speaker 3: American support for local protests with the aim of the
55:29
Speaker 3: stabilizing the government and causing a regime change. And from
55:35
Speaker 3: memory last year second half of last year, there were
55:39
Speaker 3: also some public protests in Indonesia, possibly with some involvement
55:45
Speaker 3: from external courses. And I'm concerned that we're witnessing that again.
55:51
Speaker 3: And if my sort of broader sense of our Washington
55:57
Speaker 3: is likely to respond to its current predicaments is right,
56:01
Speaker 3: namely that it is going to pursue a whole bunch
56:03
Speaker 3: of multi dimensional dese stabilizations and warfare and violence and
56:09
Speaker 3: decapitations and kidnappings terror, then you know, maybe we are
56:18
Speaker 3: you know, witnessing one of the first examples of that
56:21
Speaker 3: in Indonesia itself, so you know, things to watch out
56:25
Speaker 3: for very closely.
56:27
Speaker 1: That's definitely a big concern because as you mentioned that
56:30
Speaker 1: the Asian financial crisis in nineteen ninety eight had Indonesia
56:34
Speaker 1: very hard, and the Chinese Indonesian community in particular bore
56:41
Speaker 1: a branch of that of that violence that came out
56:45
Speaker 1: of nineteen ninety eight. You know, there was basically an
56:48
Speaker 1: ethnic program across many Chinese Indonesian neighborhood and I can
56:54
Speaker 1: tell when the you know, when the protests start to
56:58
Speaker 1: flaring up, some of my Chinese Indonesian friends got a
57:02
Speaker 1: little visibly nervous because they remember what happened in nineteen
57:06
Speaker 1: ninety eight. You know, they were old enough to have
57:08
Speaker 1: experience that. And right now, Indonesia and a lot of
57:13
Speaker 1: Southeast Asia also wailing fron like as a double whammy
57:18
Speaker 1: of liquidity crisis and also the fuel crisis that caused
57:23
Speaker 1: by the blockage at the straighter homus. Indonesia for itself,
57:27
Speaker 1: he has to import oil. You know, he has used
57:30
Speaker 1: to be a net oil exporter, but now it produces
57:33
Speaker 1: about six hundred barrels of oil per day, but it
57:36
Speaker 1: consumes one point six million barrels per day, so it
57:40
Speaker 1: has net import one million barrels of oil. And on
57:44
Speaker 1: top of that, Indonesia was exporting cheap crude oil, but
57:49
Speaker 1: have to import refined petroleum products like gasoline, diesel, jet
57:54
Speaker 1: feel because Indonesia didn't have enough refining capacities. And so
58:00
Speaker 1: that adds to the broader inflationary pressure. And and and
58:06
Speaker 1: you know, and and you know, the government so far,
58:08
Speaker 1: they're they're you know, had responded by by printing more money,
58:13
Speaker 1: and that of course led to further inflation and devaluation
58:17
Speaker 1: of Indonesian rupia. So I understand that the pressure, the
58:21
Speaker 1: social pressure is building up in Indonesia, but as well
58:24
Speaker 1: as many other Southeast Asian nations, including the Philippines. So
58:30
Speaker 1: we we live in a very volatile times. And I yeah,
58:36
Speaker 1: I do share those concerns because I look exactly look,
58:43
Speaker 1: I often sort of say to people that I think
58:47
Speaker 1: that the historical trend.
58:48
Speaker 3: Today towards you know, the unwinding or the end of
58:52
Speaker 3: American unipolarity and that sort of macro sense and the
58:55
Speaker 3: emergence of multipolarity. I think that that's a reality, but
58:59
Speaker 3: that reality is of course multi dimensional and doesn't necessarily
59:04
Speaker 3: mean we've suddenly reached a particularly stable alternative environment. In fact,
59:12
Speaker 3: I think we're going to go through a fairly protracted
59:16
Speaker 3: period of instability, both economic, ecologically induced as well as
59:20
Speaker 3: politically inspired, much of which of course revolves around the
59:27
Speaker 3: colonial and imperial powers that have dominated the globe for
59:31
Speaker 3: four hundred five hundred years. In the United States, particularly
59:34
Speaker 3: over the last eighty odd years, will seek to make
59:37
Speaker 3: use of the resources that it has to control what
59:43
Speaker 3: it can, and you've got to remember that much of
59:46
Speaker 3: this these decisions are actually decisions being made by sections
59:52
Speaker 3: of the American elite. For sections of the American elite,
59:55
Speaker 3: the economic, political, military, industrial, cultural, technical elite. Many of
1:00:01
Speaker 3: these decisions are not going to be in the interests
1:00:03
Speaker 3: of ordinary working Americans or working American families, but they
1:00:08
Speaker 3: will certainly be designed to sustain the interests of American
1:00:12
Speaker 3: elites in a period when the entitlements of American elites
1:00:17
Speaker 3: at a global level are being challenged significantly. So we're
1:00:23
Speaker 3: in a we are in multipolarity, but it's a multipolarity
1:00:26
Speaker 3: of incredible flux and where I think we are likely
1:00:33
Speaker 3: to see the outbreak of all sorts of violences, some
1:00:38
Speaker 3: of them blood genuinely bloody. Other will be of different kinds.
1:00:42
Speaker 3: As you know, the American elites seek to hold on
1:00:49
Speaker 3: and preserve what they've got.
1:00:52
Speaker 1: Well, on that note, we will wrap up our show.
1:00:57
Speaker 1: For people who wish to follow you, uh, where would
1:01:01
Speaker 1: they go?
1:01:02
Speaker 2: Doctor?
1:01:02
Speaker 3: Doctor Paul Substat Warickpal dot substat dot com number one
1:01:07
Speaker 3: And they can also check out my book Thermoeconomics in
1:01:11
Speaker 3: a Time of Monsters, which is available on Amazon.
1:01:16
Speaker 1: Thank you everyone for listening. Until next time, Bye bye,